“I am very concerned that the Local Government Association is actively encouraging councils to break the law, as well as exposing councils to potential legal action. This threatens to undermine public trust in local government,” Mr Pickles said.

“I believe such stealthy activity reinforces the need for a clampdown on dodgy parking practices by overzealous council officers.

“This Government will stand up for hard-working families and local shops against town hall parking bullies.”

The existence of the tool, which has been used by dozens of councils across the country, will reignite the controversy over parking controls.

It comes in the wake of a landmark High Court judgment which ruled that Barnet council in north London had acted illegally by pushing up the cost of residents’ parking permits explicitly to pay for road repairs and concessionary bus travel.

Parking controls are supposed to be used to tackle congestion, the latest figures show the amount of cash raised by councils escalating even though traffic volumes have dropped.

The impact of the “You Choose” has been felt by motorists in Leeds who are now facing a £2 charge to park on the street after 6pm, motorists will also have to pay on Sundays for the first time.

Liverpool, Plymouth, Kirklees are among other councils to have suggested voters consider more controlled parking zones, tougher enforcement and a cutback in free on street parking as a source of revenue.

Similar ideas have also been floated by South Lakeland and Waveney councils.

Edmund King, president of the AA, said the behaviour of local authorities was outrageous.

“It proves what we have been saying that too many local authorities have been using parking to generate revenue rather than keep traffic flowing.

“We believe the Government should investigate this as a matter of urgency as it indicates that many millions of motorists are being taken for an expensive ride.”

Professor Stephen Glaister, director of the RAC Foundation, added: “Is this the smoking gun which damns some councils?

''It is extraordinary that local authorities have been engaging with residents and suggesting that hiking parking charges is a valid way of balancing the budget. The law says it isn’t and it is now up to councils to respond to the judgment in the Barnet case and demonstrate parking charges are there to manage traffic and that alone.”

Barrie Segal, a parking campaigner, added: ''The fact that the Local Government Agency website has an online tool to enable councils to calculate their pocket picking shows the astonishing level of cynicism that councils have reached in milking the motorist.''

But a spokesman for the Local Government Association defended the use of the online tool by town halls across the country.

“This is a basic online simulation tool designed to allow the public to see in simple terms some of the difficult decisions councils are having to make to balance local budgets.

“It also allows residents to give their views to their local council on their spending priorities.

“However, in the real world councils are fully aware of the rules regarding parking revenue. Parking controls and charges are used to keep traffic moving, improve safety for pedestrians and motorists as well as ensuring people can park outside their homes or near local shops.